Money Matters

Breaking Through the Gas Ceiling

Gas prices exploded last year. Everyone — salon owners, booth renters, manufacturers, and distributors — has been affected differently by the surge. Some of the effects, like customers cutting corners, are expected; others, like taking more time for services, are not.

The greatest effect has been on our shipping. Most orders come in from thebeautybook catalog, and we ship out about 800 packages per day. Because of gas prices, shipping costs have gone through the roof. However, we’ve still been able to offer $2.99 shipping on all orders of $99 or more.

Considering that I drive 35 miles roundtrip for work, the elevated gas prices have definitely affected me. I started working longer days and cut one day a week off my schedule. I also made sure I offered my clients times on days that I needed to fill in instead of offering times on several different days. I’ve also had a few clients who have needed to cut back on services due to the higher cost of gas.

Bethany Boyd, KC’s Hair and More, Tucson, Ariz.

I have been concerned about this issue since gas prices started to sky-rocket at the beginning of 2005. I feel that one of the primary reasons why the professional beauty industry is flat or down is because every American family is spending anywhere from $100 to $200 more a month on gasoline than they did in 2004. That comes to more than $1,000 per year any way you count it. This is after-tax, disposable income.

What a lot of people do not talk about is that gas for our cars is just as important as food for our tables, and a lot more important than skipping one or two beauty salon visits, and that is, in a simple way, the complete explanation of why the professional beauty business is where it is today. People have to drive to their jobs, but they do not have to go to their weekly manicures.

The extra money must come from somewhere: fewer appointments in salons, a few less steaks on the table, a few more visits to Wal-Mart or Costco — instead of a department store or mall — and a few less $50 movie nights as opposed to a few more DVD rentals for the family at home.

Am I pessimistic? Absolutely not. We are in a phase of adjustment. The American woman will not give up her time in the beauty salon or spa for long, so get ready for 2006 to be a year of beauty. She will return.

I provide mobile services, and now, depending on the length of the trip, I charge a nominal fee. Previously, I didn’t charge those who lived within a five-mile radius. With the surge in gas prices, though, I had to start charging everyone. Clients do not mind because they would be spending the same if they were to drive to my studio. They like the convenience of staying at home and having nail services provided.

Crystalyn Sehr, Crystalyn Meredith’s Nail Studio, Des Plaines, Ill.

The marked increases in gas prices have affected my business adversely. Estelina’s Spa Products always tries to absorb part of the costs of doing business — for instance when vendors raise the cost of raw materials — instead of automatically passing the increase onto customers.

We like to encourage customer loyalty by maintaining competitive pricing and offering free shipping because we recognize that price increases affect everyone. It always causes a ripple-effect, creating more work and costs for all involved, so we try to minimize the number and percentage of price increases we send out to our customers.

When gas prices go up, I see an increase in the cost of almost all materials we use to manufacture and distribute our products. Our carriers increase the cost of our shipping as well. It is becoming more and more difficult to offer free shipping when orders meet certain criteria because, of course, I pay for the ever-increasing costs!

And just the time and work involved to calculate and communicate a price increase is something that cannot be ignored. We have to update our price sheets, write a letter of notification, publish the information to our customers worldwide, and pay our website designer to update our site. We also know our customers have to deal with those same types of things.

I do not believe gas prices have affected our service and retail business. This is mainly because we are located on a 4x6-mile island in Southwest Florida. Ninety percent of our clientele live on Marco Island or just over the bridge. Because we are a full-service salon and day spa, customers know they can come into Rick’s and receive all of their services. This eliminates excess driving, which wastes fuel.

We have seen, however, an increase in shipping and handling charges from our distributors.

I was working for JC Penney Salon, and when gas prices started rising, I started losing clients. I saw a decrease in walk-ins, and my regulars started spacing out their appointments more. This is particularly difficult for nail techs because a three-week fill compared to a two-week fill is more work and time. I had clients tell me they had to cut some personal items from their budgets to meet the need of paying for more expensive gas. I actually had to leave the salon due to the decrease in business.

I learned that when the economy is hit with hard times, people tend to do away with things that aren’t a necessity to make ends meet, and personal services and social activities are the first to go.